Sweden’s Northvolt announced on Tuesday that one of its subsidiaries, Ett Expansion AB, has filed for bankruptcy after the cancellation of a significant project. The subsidiary had been responsible for a planned tripling of capacity at Northvolt’s gigafactory in northern Sweden, but the board opted to cancel the expansion last month. Moving forward, all dealings with Ett Expansion AB will be handled by a bankruptcy trustee.
This development comes as Northvolt, a leading European battery maker, continues to consolidate its operations amid financial challenges. In September, the company announced job cuts and a streamlining of its operations, raising concerns about its future as Europe’s main hope for electric vehicle battery production. The company faces stiff competition from Chinese manufacturers and has struggled with production issues and sluggish demand.
Despite these hurdles, Northvolt remains in discussions with stakeholders and is working to secure additional funding to accelerate production at its fully-built Northvolt Ett facility. The company has already secured more than $10 billion in equity and debt financing from major backers, including Volkswagen, Goldman Sachs, and BlackRock. In January, Northvolt secured a $5 billion green loan package intended for the now-cancelled plant expansion.
Northvolt stressed that the bankruptcy filing for Ett Expansion AB does not impact its other legal entities or ongoing operations, and the company remains focused on delivering its commitments to automotive customers.
